Cronos Ecosystem - An ecosystem that moves at a breakneck pace

Overview about Cronos

Cronos is an EVM-compatible sidechain running in parallel with the Crypto.org Chain. Cronos Chain is somehow similar to Binance Smart Chain, where it has developed from a CEX to a blockchain.

Currently, Cronos is running on a Proof of Authority (PoA) consensus algorithm and is powered by Ethermint, a PoS chain interoperable with Ethereum.

Although this blockchain has just gone live in Q3 2021, Cronos is one of the most rapidly-developing ecosystems in the past few months, with TVL Ranking standing at 8th place in the whole market.

Cronos Highlights

• EVM-compatible: With Ethermint, Cronos can support any smart contracts, DAOs, or Dapps deployed on Ethereum.
• Scalable: TPS on Cronos is higher than that of Ethereum. Therefore, Cronos is faster & cheaper to execute smart contracts.
• Interoperable: IBC is a protocol that allows interaction between blockchains and will help Cronos interoperate and bridge to the Crypto.org Chain, and other IBC-enabled chains, such as Cosmos Hub, Osmosis, Terra, Injective, etc.
• Easy deployment: Users can follow the deployment instructions to quickly deploy products on the Cronos network for any purpose.

Cronos Highlight Numbers

(Updated March 3, 2022)

• Total transactions: 18,921,000
• Average gas price: 5078 Gwei ($0,012)
• Number of Unique Addresses: 411,847
• Number of Daily Transactions: 209,000
• Average Block Time: 5.82s
• Total Blocks: 1,734,577
• Market cap: $10.9B
• Total Supply: 100,000,000,000 CRO

Roadmap & Current situation

Let's take a closer look at some of Cronos' most notable milestones:

• Q4 2020: Founded Particle B, a startup accelerator dedicated to incubating projects built on Cronos.
• Q2 2021: Released a $100M Incentive Program to support Cronos-based projects.
• Q3 2021: Testnet & Mainnet went live respectively.
• Q4 2021: The DeFi space began to rapidly develop on Cronos Ecosystem.

The basic DeFi legos in the Cronos ecosystem is nearly adequate, and the TVL is gaining traction in a good way. If you look at the overall market, Cronos is now ranked 9th in terms of TVL, which is only 3 – 4 months old, even though it was only mainnet in November, 2021.

The rapid construction of the Cronos Chain suggests that Crypto.com had been planning to build their own blockchain for a long time.

Cronos Ecosystem

Crypto.com, a well-known CEX in the market with 10 million base users, has helped Cronos grow the ecosystem at an impressive pace, far ahead of other chains that have been around for many years.

There have been more than 120+ projects launched on Cronos with a total value exceeding $2B, despite the gloomy market sentiment during this period when the market was on fire and then affected by the news of the war in Ukraine.

In this ecosystem, Cronos' native DEX, VVS Finance, accounts for more than 56% of the TVL ecosystem.

DEX

VVS Finance: Cronos' native DEX is supported directly by Particle B and currently has over $1.33B TVL, an admirable number when compared to other ecosystem DEXs, such as QuickSwap ($800M), TraderJoe ($1.5B), and Raydium ($600M). VVS Finance's current trading volume is above (+/-) 20M/day on a daily average basis.

As one of the DEXs experiencing rapid user growth, VVS Finance has added more than 87k new users in the last 30 days alone.

MM Finance: A DeFi Hub including DEX, Yield Aggregator, Launchpad and Algorithmic Token (Savanna). At the moment, MM Finance charges the lowest swap fees, at just 0.17 percent per swap.

Notably, the current trading volumes of MM Finance is even higher than that of VVS Finance, which is the native DEX of Cronos. The yield on this DEX ranges from 40–300% APR depending on each pair.

When it comes to user growth, MM Finance is recently outpacing both Dodo (BSC) and VVS Finance.

CronaSwap: There is now approximately $26 million TVL in CronaSwap. It also supports the veCRONA token to increase yield for loyal users.  For those who want to "earn", there's a GameFi Hub in this DEX that includes four different games: Coin Toss, CRO Roll, Dice Roll and Roulette.

Crodex: Currently, this DEX supports a large number of LP pairs, but the TVL and trading volume are still quite low, indicating that there are not many users in this protocol at this time. Unlike its rivals in other ecosystems, Crodex still lacks a unique innovation point that sets it apart from the pack.

We have Elk Finance, ChronoSwap, Swapp, Empire DEX, PhotonSwap, and other names that existed in addition to the other four DEXs with high TVL. However, the TVL of these remaining DEXs seems to be low (< $3M).

Cronos has and continues to appear in a large number of DEXs, but only four of them have consistent TVL and trading volume. With Particle B's support, VVS is likely already the DEX leader in the Cronos ecosystem, with TVL setting the pace and far ahead of its competitors.

The MM Finance candidate, on the other hand, deserves our attention due to their impressive rate of growth. The project also mentions that it will become Cronos' DeFi Hub when they have many other products besides DEX, such as Savanna Finance (Algorithmic Token) and MM Optimizer (Yield Aggregor). These two products also have massive TVL in the Cronos ecosystem.

Lending

Tectonic, which is supported by Particle B, is currently the lending protocol with the most users and TVL on Cronos.

Tectonic’s capital efficiency ratio exceeds 61 percent, which is an impressive figure when compared to lending protocols in other ecosystems such as Solend (35%), TraderJoe (36%),... This demonstrates that the users' demand for cash is quite high, as most users are in need of borrowing more money to use in the Cronos ecosystem.

As can be seen, the majority of the markets on Tectonic have a utilisation rate of more than 50%. Especially, nearly 90 percent of the CRO money market's total supply is being borrowed by borrowers, a high borrowing rate.

Mimas Finance is the second candidate, with a TVL volume approaching $15 million. However, this figure lags far behind Tectonic (20 times). The supply side APR for USDT and USDC is one notable point of Mimas, with 36 percent and 47 percent for each token, respectively. Apart from that, Mimas Finance still does not have any distinguishing features.

Other projects in the ecosystem, such as Annex and Agile, are not very noticeable because their current traction is very small. That is demonstrated by the TVL volume and the amount borrowed, both of which are less than $1.5M.

Stablecoin

The current state of stable coins in the Cronos ecosystem is follows:

Tokens pegged to the US Dollar

• USDT: $478M
• USDC: $616M
• DSHARE: $245K
• DNA: $148K

Algorithmic Tokens

• SKY (pegged to CRO): $52M
• SVN (pegged to MMF): $21.5M
• DARK (Pegged to CRO): $5M
• GAUR (pegged to ETH): $159K

The total value of stablecoins in this ecosystem exceeds $1.1 billion, which is quite impressive for a new chain like Cronos. In addition to famous stablecoins for use in DeFi like USDT and USDC, we also see other stablecoins appearing like DSHARE and DNA.

However, with a market cap of less than $300,000, these stable tokens aren't all that impressive.

Derivatives

Derivatives are the more advanced financial products in DeFi, so it's understandable that the ecosystem's derivatives are still in their infancy for a November mainnet ecosystem.

There are currently only two projects, Bishares and Zoo, but their traction is insignificant. Particle B had not officially announced their supported derivative protocols at the time of writing.

Therefore, only when a large number of users and money flow into this ecosystem can it make the derivatives sector shine.

BiShare's liquidity and volume figures are still very negligible.

Launchpad

A launchpad is a critical component in attracting users to a single ecosystem. The reason for this is that participating in IDOs on Launchpads normally results in a large profit in a short period of time, which everyone desires.

Users will flood a new ecosystem if one launchpad project successfully launches any project that gives a very high ROI afterwards. VVS Finance (DeFi Hub), MM Finance (DeFi Hub), Cronos World (not yet launched), Cronos Launcher, DexPad, and LootPad are some of the names in the Cronos ecosystem.

But only VVS Finance and MM Finance have launched a small number of projects, which is still quite small in comparison to other names.

SINGLE is the first project to be launched on VVS Finance's IGO platform. The IDO price of each SINGLE at the time was $0.05; now, each SINGLE is priced at $0.121, resulting in a 240% profit for participants.

MM Finance has launched seven projects and is currently selling its eighth, the Mad Meerkat ETF, unlike VVS Finance, which has only launched one project.

However, it's important to reconsider the ROI performance of MM Finance's Launchpad, when 4/7 projects show a negative ROI after IDO and the remaining projects show profits only ranging from 100–300%.

Cronos World, DexPad, Cronos Launcher, and LootPad, among the remaining projects, have yet to launch any projects because they are still in the development stage.

Users on Cronos will feel let down if launchpads on this ecosystem produce negative ROI. As a result, it will be more difficult to attract retailers to join the ecosystem through this sector.

The reason can be explained by the market situation after the Cronos mainnet became saturated and gloomy, so there is no reason to promote money inflows to push the ROI from 10x up as desired by users.

Yield Aggregators

Cronos' Yield Aggregator protocol will typically utilize the LP pools from DEXs, such as VVS Finance, MM Finance, CronaSwap, and Crodex. The one that is now leading the TVL in this sector is MM Optimizer (MMO) with $157M, a native yield aggregator in Cronos.

Following that are two well-known yield optimizer platforms, Beefy Finance and Autofarm, which account for $40M and $27M in TVL, respectively. These two protocols also support the most pools for serving users.

However, it should be noted here that although MM Optimizer is occupying the highest amount of TVL, this protocol currently only provides vaults from a single DEX, which is MM Finance (the parent platform that created MM Optimizer). That is also the reason this platform has only 15 vaults, resulting in its inability to optimize the attractive yields from other DEXs.

Other Yield Aggregator protocols that focus solely on Cronos lag behind Beefy and Autofarm. Therefore I'm still looking forward to the development of native protocols, which will allow users to have more options for maximizing their yield in the Cronos ecosystem.

Bridge

To transfer funds between Cronos, the following bridges are currently in use:

• Cronos Bridge: This is a bridge built by the foundation itself. Cronos Bridge currently supports the transfer of assets from three major chains: Crypto.org, Terra, and Cosmos. In the future, this bridge will be able to accept Ethereum asset transfers so that it can take advantage of the massive money flows generated by this ecosystem.
• Multichain: One of the best-known bridges. Many different chains like BNB, Celo, and Layer2 like Metis and Boba are currently supported by Multichain for asset transfers from and to Cronos.

There is also Relay Chain, Elk Finance, and EvoDeFi that support bridging assets between other chains. However, on Elk Finance, only the native token of this protocol, the ELK Token, is allowed to be transferred. The remaining EvoDeFi bridge has not yet come into operation.

NFT & NFT Marketplace

Currently, there are more than 25 NFT collectibles on Cronos. This is the general situation of one ecosystem when it has money flowing into it, because such NFT projects easily generate a high ROI for builders and flippers.

Furthermore, the NFT Marketplace sector in Cronos now has three names: CroSea, Agora, and Ebisu's Bay. In general, the NFT Marketplace market is still dormant when the trading volumes of these exchanges are all less than $1M.

In Cronos, most of the NFTs lack innovation, use cases and some just simply fork off of well-known NFT projects like BoredApe, Punks, etc. However, there is still a positive side that the aforementioned NFT projects will make the Cronos ecosystem appear more vibrant to outsiders.

Investment opportunities on Cronos Ecosystem

Token Investment

Cronos is an emerging ecosystem, and although the market is currently quite unstable due to political news, Cronos itself is still maintaining the amount of TVL and not letting it drop sharply. Its TVL, on the other hand, is actually going up a little, which is very outstanding compared to BSC, Fantom, Solana, or Polygon TVL, which have all gone down a lot recently.

It's important to keep in mind that the CRO Token's value has increased by a factor of x32 since its ATL, so you should exercise caution when making a decision because the growth potential has been significantly reduced

Skin in the game: Staking/Yield Farm/Lending/Launchpad

Unlike when Cronos first went mainnet, when many DEXs launched incentive programmes with APRs of up to a million percent, farming opportunities on this chain are now much less appealing to newcomers.

However, Cronos, on the other hand, is still a good choice if you seek to earn a stable and safe yield.

For CRO holders, there are numerous staking/farming/lending opportunities to earn yields ranging from 20% to 100% from DEXs, lending protocols, and yield aggregators such as VVS Finance, MM Finance, CroDex, Tectonic, and others.

For newcomers, farming stablecoins is a good option when stablecoin pairs on DEXs give yields of 10 – 25% APR, which is not a bad yield.

Currently, the performance of all Cronos launchpads is unstable. Users can lose money even if a project has just completed IDO, so I advise caution when making investment decisions on launchpads, unless you believe that that project is good and is also supported by a high-quality launchpad platform.

Airdrop/Retroactive opportunities

Cronos currently has almost all of the basic components of DeFi, such as DEX, Lending Protocol, Stablecoin, Launchpad, and so on. However, some more advanced financial products, such as derivatives, options, and predictions, have yet to be presented. Note that these products have a significant market share in reputable markets such as Ethereum, Arbitrum, and even traditional financial markets.

It's a great way to keep an eye on projects that are being developed in areas Cronos does not yet cover, such as participating in a testnet and providing feedback to a project or being an early adopter. I believe that if you truly contribute to the project's progress, you will be rewarded for your efforts.

NFT

The NFT market for Cronos is currently lacking new ideas and innovation. When investing in NFT collectibles, you should exercise extreme caution because the current ability to bury capital is extremely high; you should do so only when the NFT market is active and there is a significant inflow of speculative cash into the ecosystem.

Cronos Predictions

Other blockchains typically build infrastructure first and then build an ecosystem later, but Cronos is going the other way around with its approach. As the infrastructure is being built, they are developing an ecosystem in parallel with that work.

To see Cronos' rapid and almost adequate progress through each of the legos, from media to DeFi stacks and infrastructure, NFT to GameFi is evident. As long as Cronos keeps moving in the same direction as BNB Chain, the ecosystem will be more vibrant, with a constant flow of Dapps.

Besides, Cronos will not benefit fully from following the BNB Chain model because it is difficult to compete with the TVL of over $10 billion, which is as well-known as BNB. Cronos, on the other hand, should follow Fantom's direction to develop new products, like the ve(3,3) token recently introduced.

Furthermore, Cronos is also backed by Crypto.com Exchange, so I believe that in the future, this CEX may have programmes encouraging users to switch from CEX to DEX in order to approach new users to the ecosystem. A free CRO transfer from Crypto.com Exchange to Cronos or a discount on trading fees, for example, could be one of the ways

Conclusion

Here are a few of my quick summaries:

• Cronos is an EVM chain that can support any Ethereum smart contracts, DAOs, or Dapps, and it also benefits from being a part of the Cosmos ecosystem, as IBC can help Cronos communicate with other Cosmos chains such as Osmosis, Terra, Injective, and others.
• Cronos is a rapidly expanding ecosystem. In the future, it could be a second BNB chain as it is backed by a large CEX in Europe, Crypto.com Exchange.
• Cronos' basic DeFi Legos, particularly the DEX, are relatively complete. However, the lending ecosystem is still not vibrant in terms of DApps.
• Advanced financial products such as derivatives, options, and forecasting are insufficient. You should look for retroactive opportunities from missing sectors in the ecosystem.

What are your thoughts on the Cronos ecosystem? Please leave a comment below to further discuss with Coin98 Insights!